Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

FOR IMMEDIATE RELEASE: 
Oct 10 2014

$28 million is the largest payout by a skilled-nursing chain to resolve government allegations of subpar care

Hundreds of residents at 15 Washington facilities will benefit from improved care

SEATTLE — Attorney General Bob Ferguson announced today that hundreds of residents at 15 skilled-nursing facilities in Washington will benefit from an unprecedented multistate agreement with Extendicare Health Services, Inc. (“Extendicare”) and its subsidiary, Progressive Step Corporation (“ProStep”).

The agreement, by Washington, seven other states and the federal government, resolves allegations that Extendicare billed Medicaid for substandard nursing services that were so deficient they were effectively worthless. Extendicare is also required to provide monitored and improved care to the affected residents. Ferguson’s office helped lead this first-of-its-kind multistate effort to hold a corporate nursing facility accountable for substandard nursing care.

“Our seniors and other vulnerable adults have a right to be treated with dignity and respect, not subjected to substandard care,” said Ferguson. “Nursing care facilities should know that we are watching and will hold them accountable.” 

Extendicare is a Delaware corporation that, through its subsidiaries, operates 146 skilled- nursing facilities in 11 states. ProStep provides physical, speech and occupational rehabilitation services. There are 15 Extendicare facilities in Washington state.

Extendicare will pay the states and the federal government a total of $28 million in civil damages to compensate Medicaid, Medicare and various federal healthcare programs for harm suffered as a result of its conduct. This resolution is the largest failure of care resolution reached with a skilled-nursing chain. Washington’s total share of the resolution is roughly $1 million with $541,871 returning directly to the state Medicaid program. Another $594,633 goes to the federal government for its share of Washington’s Medicaid program. The federal government matches state funds to support the Medicaid program in Washington.

Allegations stated that between 2007 and 2013, in 33 of its skilled-nursing homes in eight states, Extendicare billed Medicare and Medicaid for materially substandard skilled-nursing services and failed to provide care to its residents that met federal and state standards of care and regulatory requirements.

  • The states and the federal government allege that Extendicare:
  • Failed to have a sufficient number of skilled nurses to adequately care for its  residents; 
  • Failed to provide adequate catheter care to some of the residents; and
  • Failed to follow the appropriate protocols to prevent pressure ulcers or falls.

In addition, as part of this resolution, Extendicare and ProStep must enter into a five-year chain-wide Corporate Integrity Agreement. To protect residents against substandard care, Extendicare must conduct a comprehensive compliance program. 

Extendicare’s compliance program must include, among other things, both internal and external reviews of quality of care, and annual reviews of Medicare claims by an independent auditor.

This resolution illustrates the state and federal government’s emphasis on jointly combating healthcare fraud. It was the result of a coordinated federal and state effort by the Attorneys General of Indiana, Kentucky, Michigan, Minnesota, Ohio, Pennsylvania, Washington and Wisconsin, the U.S. Attorneys for the Eastern District of Pennsylvania and the Southern District of Ohio, and the U.S. Department of Health and Human Services Office of Inspector General. The investigation was also supported by the Department’s Elder Justice Initiative.

Washington state Assistant Attorney General Michael Pellicciotti helped lead the national settlement team for the states.  Assistant Attorney General Aileen Miller and Medicaid Fraud Control Unit Investigator Tim Scott also worked on this case.

Fighting Medicaid fraud in Washington

The Attorney General's MFCU is responsible for investigating and prosecuting fraud committed by healthcare providers against the state’s Medicaid program.

In addition, through a statewide law enforcement network, the unit coordinates investigation and prosecution of abuse and neglect of vulnerable adults in Medicaid-funded residential facilities.

  • Report suspected Medicaid fraud: 1-800-562-6906 or send an email to HotTips@hca.wa.gov.
  • You can also report provider fraud via the Attorney General’s Office website.

The Washington Department of Social and Health Services, Office of Fraud & Accountability investigates client fraud. You can report Medicaid Client Fraud via the Department’s Online Complaint Form, call the Welfare Fraud Hotline at 1-800-562-6906 or send the complaint to Welfare Fraud Hotline, P.O. Box 45817, Olympia, Washington 98504-5817. 

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The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Attorney General Bob Ferguson is working hard to protect consumers and seniors against fraud, keep our communities safe, protect our environment and stand up for our veterans. Visit www.atg.wa.gov to learn more.

CONTACT:
Alison Dempsey-Hall, Acting Communications Director